[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1526 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 1526

  To amend title XVIII of the Social Security Act to modify policies 
  relating to payment under the Medicare program for durable medical 
 equipment, orthotics and prosthetics, and prosthetic devices, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 23, 2015

 Mr. Meadows introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on Energy 
    and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend title XVIII of the Social Security Act to modify policies 
  relating to payment under the Medicare program for durable medical 
 equipment, orthotics and prosthetics, and prosthetic devices, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Audit Improvement Act of 
2015''.

SEC. 2. MEDICARE PAYMENT FOR DURABLE MEDICAL EQUIPMENT, ORTHOTICS AND 
              PROSTHETICS, AND PROSTHETIC DEVICES.

    (a) Use of Prosthetist and Orthotist Notes for Determinations of 
Medical Necessity.--Section 1834(h)(1) of the Social Security Act (42 
U.S.C. 1395m(h)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(I) Use of prosthetist and orthotist notes for 
                determinations of medical necessity.--In determining 
                under section 1862(a)(1) whether an orthotic or 
                prosthetic or prosthetic device furnished to an 
                individual on or after the date of the enactment of 
                this subparagraph is reasonable and necessary, any 
                records or documentation of an orthotist or prosthetist 
                who furnished such orthotic or prosthetic or prosthetic 
                device to such individual shall be considered part of 
                the medical record of the individual.''.
    (b) Authorizing MAC and RAC Review for Supplier License or 
Accreditation for Durable Medical Equipment and Orthotics and 
Prosthetics.--
            (1) MAC review.--Section 1874A(a)(4)(A) of the Social 
        Security Act (42 U.S.C. 1395kk-1(a)(4)(A)) is amended by 
        inserting ``, including determining that payment shall not be 
        made to a supplier of durable medical equipment, or of 
        orthotics and prosthetics, for which a claim for payment is 
        made on or after the date of the enactment of the Medicare 
        Audit Improvement Act of 2015 on account of the application of 
        section 1834(h)(1)(F) (relating to supplier licensing or 
        accreditation by a National Board)'' before the period at the 
        end.
            (2) RAC review.--Section 1893(h) of the Social Security Act 
        (42 U.S.C. 1395ddd(h)) is amended by adding at the end the 
        following new paragraph:
            ``(10) Review of supplier license or accreditation for 
        durable medical equipment and orthotics and prosthetics.--For 
        purposes of paragraph (1), with respect to durable medical 
        equipment and orthotics and prosthetics for which a claim for 
        payment was made by a supplier in 2011 or a subsequent year, a 
        payment that should not have been made to such supplier for 
        such durable medical equipment or such orthotics and 
        prosthetics on account of the application of section 
        1834(h)(1)(F) (relating to supplier licensing or accreditation 
        by a National Board) shall be considered an overpayment under 
        this title.''.
    (c) Exempting Services That Receive Prior Authorization From RAC 
Review.--Section 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)), as amended by subsection (b)(2), is further amended--
            (1) in paragraph (1), by inserting ``subject to paragraph 
        (11),'' after ``Program,''; and
            (2) by adding at the end the following new paragraph:
            ``(11) Services that receive prior authorization exempted 
        from review.--Recovery audit contractors may not conduct 
        reviews with respect to payments under this title for durable 
        medical equipment, orthotics or prosthetics, or prosthetic 
        devices for which audits under this subsection have not been 
        initiated before the date of the enactment of this paragraph 
        and to which prior authorization under this title applies.''.
    (d) Annual Report on Overturned MAC and RAC Denials.--Section 1874A 
of the Social Security Act (42 U.S.C. 1395kk-1) is amended by adding at 
the end the following new subsection:
    ``(h) Annual Report on Overturned MAC and RAC Denials.--
            ``(1) In general.--Not later than March 1 of 2016, and of 
        each year thereafter, the Secretary shall submit to Congress a 
        report that includes the information described in paragraph 
        (2).
            ``(2) Information described.--The information described in 
        this paragraph, with respect to determinations by medicare 
        administrative contractors that payment cannot be made, and by 
        recovery audit contractors that payment should not have been 
        made, under this title for items and services, is the 
        following:
                    ``(A) The number of such determinations that, in 
                the prior year, were determined on appeal to have been 
                incorrect.
                    ``(B) The HCPCS codes that, in the prior year, 
                accounted for--
                            ``(i) the greatest number of such 
                        determinations; and
                            ``(ii) the greatest total amount payment 
                        being at issue in such determinations.
                    ``(C) The number of such determinations that, in 
                the prior year, were based upon a determination--
                            ``(i) that the items and services were 
                        furnished to an individual as an inpatient 
                        rather than as an outpatient;
                            ``(ii) regarding the application of the 
                        medical review activities described in the 
                        notice entitled `Selecting Hospital Claims for 
                        Patient Status Reviews: Admissions On or After 
                        October 1, 2013', posted on the Internet 
                        website of the Centers for Medicare & Medicaid 
                        Services (commonly known as the `two-midnights 
                        rule');
                            ``(iii) that applied to a provider of 
                        outpatient services; and
                            ``(iv) regarding a claim for payment for 
                        orthotics or prosthetics or prosthetic 
                        devices.''.
    (e) Treating Orthotics and Prosthetics Separately From Medical 
Equipment and Supplies.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m) is amended--
                    (A) in subsection (j)(5)--
                            (i) by striking subparagraph (C); and
                            (ii) by redesignating subparagraphs (D) 
                        through (F) as subparagraphs (C) through (E), 
                        respectively;
                    (B) by adding at the end the following new 
                subsection:
    ``(r) Requirements for Orthotists and Prosthetists.--
            ``(1) Issuance and renewal of supplier number.--
                    ``(A) Payment.--No payment may be made under this 
                part for orthotics and prosthetics (as described in 
                section 1861(s)(9)) furnished by a supplier of 
                orthotics and prosthetics unless such supplier obtains 
                (and renews at such intervals as the Secretary may 
                require) a supplier number.
                    ``(B) Standards for possessing a supplier number.--
                A supplier of orthotics and prosthetics may not obtain 
                a supplier number unless the supplier--
                            ``(i) complies with all applicable State 
                        and Federal licensure and regulatory 
                        requirements;
                            ``(ii) acquires accreditation from the 
                        American Board for Certification in Orthotics, 
                        Prosthetics and Pedorthics, Inc., the Board of 
                        Certification/Accreditation, International, or 
                        such other accreditation entity that the 
                        Secretary determines to have accreditation 
                        standards that are equivalent to the 
                        accreditation standards of such boards;
                            ``(iii) maintains a physical facility on an 
                        appropriate site;
                            ``(iv) has proof of appropriate liability 
                        insurance; and
                            ``(v) meets such other requirements as the 
                        Secretary may specify.
                    ``(C) Prohibition against multiple supplier 
                numbers.--The Secretary may not issue more than one 
                supplier number to any supplier of orthotics and 
                prosthetics unless the issuance of more than one number 
                is appropriate to identify other entities under the 
                supplier's ownership or control.
                    ``(D) Prohibition against delegation of supplier 
                determinations.--The Secretary may not delegate (other 
                than by contract under section 1842) the responsibility 
                to determine whether suppliers meet the standards 
                necessary to obtain a supplier number.
                    ``(E) Construction relating to previously issued 
                and renewed supplier numbers.--Supplier numbers 
                obtained under subsection (j)(1) prior to the enactment 
                of this subsection by suppliers of orthotics and 
                prosthetics that meet the standards described in 
                subparagraph (B) shall be considered to have obtained a 
                supplier number for purposes of subparagraph (A).
            ``(2) Certificates of medical necessity.--
                    ``(A) Information provided by suppliers of 
                orthotics and prosthetics on certificates of medical 
                necessity.--
                            ``(i) In general.--A supplier of orthotics 
                        and prosthetics may distribute to physicians, 
                        or to individuals entitled to benefits under 
                        this part, a certificate of medical necessity 
                        for commercial purposes if the certificate 
                        contains the following information:
                                    ``(I) An identification of the 
                                supplier and the beneficiary to whom 
                                such orthotics and prosthetics are 
                                furnished.
                                    ``(II) An identification of the 
                                treating physician, including the name, 
                                Medicare provider number, address, and 
                                telephone number of such physician.
                                    ``(III) A description of such 
                                orthotics and prosthetics.
                                    ``(IV) Any billing code identifying 
                                such orthotics and prosthetics, 
                                including the HCPCS codes, and summary 
                                descriptors of the items and services 
                                being recommended.
                                    ``(V) The codes used under this 
                                title for payment for such orthotics 
                                and prosthetics, a description of the 
                                medical and functional condition of the 
                                beneficiary, and information about the 
                                need of the beneficiary for the 
                                orthotics or prosthetics.
                                    ``(VI) Any other administrative 
                                information identified by the 
                                Secretary.
                            ``(ii) Information on payment amount and 
                        charges.--If a supplier distributes a 
                        certificate of medical necessity for orthotics 
                        and prosthetics, the supplier shall also list 
                        on the certificate of medical necessity the fee 
                        schedule amount and the supplier's charge for 
                        the orthotics and prosthetics being furnished 
                        prior to distribution of such certificate to 
                        the physician.
                            ``(iii) Penalty.--Any supplier of orthotics 
                        and prosthetics who knowingly and willfully 
                        distributes a certificate of medical necessity 
                        in violation of clause (i) or fails to provide 
                        the information required under clause (ii) or 
                        (iii) is subject to a civil money penalty in an 
                        amount not to exceed $1,000 for each such 
                        certificate of medical necessity so 
                        distributed. The provisions of section 1128A 
                        (other than subsections (a) and (b)) shall 
                        apply to civil money penalties under this 
                        subparagraph in the same manner as they apply 
                        to a penalty or proceeding under section 
                        1128A(a).
                    ``(B) Signature of treating physician required.--
                The Secretary shall require that, in order for a 
                certificate of medical necessity submitted to the 
                Secretary to be treated as showing that orthotics and 
                prosthetics are reasonable and necessary for the 
                diagnosis or treatment of an illness or injury or to 
                improve the functioning of a malformed body member, the 
                certificate of medical necessity be signed by the 
                treating physician.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `certificate of medical necessity' means a 
                form or other document, including a detailed written 
                order, containing information required by the Secretary 
                to be submitted to show that orthotics and prosthetics 
                are reasonable and necessary for the diagnosis or 
                treatment of illness or injury or to improve the 
                functioning of a malformed body member.
            ``(3) Coverage and review criteria.--The Secretary shall 
        annually review the coverage and utilization of orthotics and 
        prosthetics to determine whether such orthotics and prosthetics 
        should be made subject to coverage and utilization review 
        criteria, and if appropriate, shall develop and apply such 
        criteria to such items.
            ``(4) Limitation on patient liability.--
                    ``(A) In general.--Subject to subparagraph (B), if 
                a supplier of orthotics and prosthetics furnishes 
                orthotics and prosthetics to an individual for which no 
                payment may be made under this part (including, subject 
                to section 1879, because the orthotics and prosthetics 
                are not reasonable and necessary for the diagnosis or 
                treatment of illness or injury or to improve the 
                functioning of a malformed body member, as required 
                under section 1862(a)(1)), any expenses incurred for 
                such orthotics and prosthetics furnished to an 
                individual by such a supplier not on an assigned basis 
                shall be the responsibility of such supplier. The 
                individual shall have no financial responsibility for 
                such expenses and the supplier shall refund on a timely 
                basis to the individual (and shall be liable to the 
                individual for) any amounts collected from the 
                individual for such items or services. The provisions 
                of subsection (a)(18) shall apply to refunds required 
                under the previous sentence in the same manner as such 
                provisions apply to refunds under such subsection.
                    ``(B) Exception.--If a supplier of orthotics and 
                prosthetics furnishes orthotics and prosthetics to an 
                individual for which payment is denied in advance under 
                subsection (a)(15), expenses incurred for such 
                orthotics and prosthetics shall be the responsibility 
                of the individual.''.
            (2) Conforming amendments.--Section 1865(a)(1) of the 
        Social Security Act (42 U.S.C. 1395bb(a)(1)) is amended by 
        inserting ``or section 1834(r), as applicable,'' after 
        ``section 1834(j)''.
    (f) Limitation of Competitive Acquisition for Off-the-Shelf 
Orthotics.--Section 1847(a)(7)(A) of the Social Security Act (42 U.S.C. 
1395w-3(a)(7)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following new clause:
                            ``(ii) by an orthotist or prosthetist 
                        described in subclause (II) or (III) of section 
                        1834(h)(1)(F)(iii) to the patients of the 
                        orthotist or prosthetist as part of the 
                        professional service of the orthotist or 
                        prosthetist; or''.
    (g) Limiting Recoupment From Medicare Appellants Until Completion 
of ALJ Appeals Process.--Section 1869 of the Social Security Act (42 
U.S.C. 1395ff) is amended by adding at the end the following new 
subsection:
    ``(j) Limitation on Recoupment Prior to Completion of ALJ Appeals 
Process.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the Secretary may not recoup more than half of 
        the amount of any payments made to a qualifying provider or 
        supplier with respect to a claim for items or services that is 
        subject to a determination, reconsideration, or hearing under 
        this subsection, before--
                    ``(A) the date on which a decision has been 
                rendered under subsection (d)(1) with respect to such 
                claim; or
                    ``(B) in the case of a determination or 
                reconsideration for such claim which is not eligible 
                for a hearing under subsection (d)(1), the date on 
                which the appeals process for such claim under this 
                section (other than subsection (h)) is treated as 
                exhausted.
            ``(2) Qualifying provider or supplier defined.--For 
        purposes of paragraph (1), the term `qualifying provider or 
        supplier' means a provider of services or supplier that--
                    ``(A) has maintained a Medicare provider number for 
                six years or longer;
                    ``(B) is not under investigation for any potential 
                violations of applicable Federal and State laws and 
                regulations;
                    ``(C) has a good record of submitting proper claims 
                for items or services under this title, as determined 
                by the Secretary; and
                    ``(D) furnished the items or services described in 
                paragraph (1) to an individual in person.''.
    (h) Eligibility for Payment for Suppliers and Providers Based on 
Qualifications.--
            (1) In general.--Title XVIII of the Social Security Act is 
        amended by inserting after section 1863 (42 U.S.C. 1395z) the 
        following new section:

``SEC. 1863A. ELIGIBILITY FOR PAYMENT FOR SUPPLIERS AND PROVIDERS BASED 
              ON QUALIFICATIONS.

    ``(a) In General.--No payment may be made under this title for an 
item or service that is furnished--
            ``(1) in a State that requires a provider or supplier to be 
        licensed in order to furnish such item or service, unless the 
        provider or supplier furnishing such item or service possesses 
        all applicable licensure from the State; or
            ``(2) in a State that does not require a provider or 
        supplier to be licensed in order to furnish such item or 
        service, unless the provider or supplier meets all applicable 
        qualifications, as determined by the Secretary.
    ``(b) Applicable Qualifications Defined.--For purposes of 
subsection (a), the term `applicable qualifications' means, with 
respect to a provider or supplier, all applicable accreditations, 
certifications, and credentials required of such provider or supplier 
under this title in order for such provider and supplier to receive 
payment under this title for items or services furnished by such 
provider or supplier, including the requirements described in the 
special payment rules for certain prosthetics and custom-fabricated 
orthotics under section 1834(h)(1)(F).''.
            (2) Effective date.--This section shall apply with respect 
        to items and services furnished on or after the date of the 
        enactment of this section.
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